When Do I Get My Tax Documents?

Now that tax time is upon us, people tend to get into a frenzy when they haven’t received their tax documents from their employer, bank, etc. Here are some details to let you know if and when you should be receiving them:

W2: Your employer should have sent you this form by February 1st. That is the mandated date by the government. If you have still not received one be sure to contact your HR department.

1099-INT: These documents are provided to you by financial institutions where you have received interest. Most people will receive these from banks where their accounts are provided. Note that you will not receive a 1099-INT from a bank where you did not accumulate more than $10 worth of interest. 1099-INT documents should arrive at your home by February 1st.

1099-DIV: This document is sent out by brokerages where you have bough and sold stock. These show the dividends/losses you incurred during the year. In just the past few years, they have extended the date when you are to receive a 1099-DIV by 15 days, so you should receive it by February 15th.

1099-R: If you took rolled over a tax free retirement account to an IRA, or took a disbursement of cash, you will be receiving a 1099-R. This should arrive by February 1st.

1099-MISC: If you did any side work or made any money from a job where taxes were not deducted, you will get a 1099-MISC from the employer that paid you. You only get one if the dollar amount was larger than $600 for the year. There is a lot of debate as to whether or not you need to claim amounts less then $600 since a 1099-MISC was not issued. My advice is to better be safe than sorry and do it! This should be received by February 1st.

Those are a list of the common tax forms that people will be receiving for the 2009 tax year. Before you meet with your accountant or sit down to do your taxes via TurboTax or any of the other online tax providers, make sure that you have accounted for all your forms for all of your accounts. This will just save you time and hassle later by having to file an ammended return.

$7500 First Time Homebuyer Credit

Not many people are aware of the $7500 tax credit that that IRS is offering toward the purchase of a new home. The first-time homebuyer is a refundable credit of up to $7,500 that applies to home purchases after April 8, 2008 and before July 1, 2009. This means that the credit will be paid out to eligible home buyers, even if they owe no tax or the credit is more that the tax owed on your return.

This credit works like an interest free loan. If you qualify, you will receive the $7500 as part of your 2008 tax return. The repayment begins in the second year after you receive the money. So you would begin paying it back starting 2010. The repayment period is 15 years and the payment comes out of your yearly tax return. So if you receive the full $7500 you would pay back $500 out of your tax return for the next 15 years.

To qualify for the credit you must meet the following requirements:

• You must purchase your home after April 8, 2008 and before July 1, 2009.
• The home must be your main home, the one that you live in most of the time
• To qualify as a home, it must include sleeping, cooking, and toilet facilities. A home can be a house, condominium, cooperative, mobile home, house trailer, boat, or similar property
• Your adjusted gross income with a few changes (also known as your modified adjusted gross income) must be less than $95,000 if filing single or less than $170,000 if married filing jointly. You qualify for only part of the credit if your modified adjusted gross income is between $75,000 and $95,000 if filing single (or between $150,000 and $170,000 if filing jointly)

You can’t claim this credit if you:

• Owned a main home at any time in the prior three years preceding your purchase
• Purchased this home from a family member, including your grandparents, parents, spouse, children, or grandchildren.
• Stopped using your home as your main home.
• Sold your main home before the end of the year.
• Are a nonresident alien.
• If you ever took or were eligible to take the District of Columbia first-time homebuyer credit for any taxable year.
• You financed your home from any source that uses tax-exempt mortgage revenue bonds.

I don’t qualify for the credit, however I wanted to see how this worked in TurboTax. I answered the questions like I was a first time homebuyer and sure enough my refund increased by $7500. Not a bad way to receive an interest free loan that you can payback over time. And the fact that the repayment is taken out of your tax returns makes this very hassle free.

I strongly recommend that if you bought a home since April 8 and you fit the qualifications you should definetly jump on this one.

See IRS Publication 530 for more detail.

Free Turbotax For State Farm Customers – 2008 Tax Year

Once again State Farm is giving away Intuit’s Online TurboTax Free to its customers. They have done this for the last 2 years and it has been very successful. This year is a bit different however. This year you can only get access to the free Tubotax by having a State Farm Bank product added to your online account. Just having a State Farm insurance product isn’t good enough. State Farm bank offers products such as Credit Cards, Savings/Checking accounts and CD’s.

One easy way to get this is to sign up for a State Farm Credit Card. They have no annual fee and once you get your card you can setup access to get onto the State Farm Portal. Once you log in, you will see the following “File Your Taxes For Free” link.

Once you click through that link you will be directed to the TurboTax site with their online product listing and fees. Notice that only TurboTax Basic and Deluxe are Free, however the Premier and Home & Business versions are severely discounted.

Also note that it says “State Additional”. They said that last year too but there was no charge once you completed your taxes. As I get closer to filing my 2008 taxes, I will update this post to verify that the state filing fee is in fact free.

The online version of TurboTax does not require any software install on your part. Everything is kept online securely and is available to print out anytime even after you file your taxes. All your data from the previous years is carried forward to help reduce retyping all that data every year. I have used it for the past 3 years and have had no complaints. One advantage of the online version versus the desktop version is that you get immediate updates. No more waiting to download federal and state updates!

Also be sure to remember that if it takes you a few sessions to complete your taxes, be sure to get into TurboTax through the State Farm link each time. There have been reports that you only need to go through the State Farm link the final time before you file, but just to be safe I would always use the link each time you need to go back in.

If you don’t have any State Farm accounts, Turbo Tax has pretty decent rates to file your taxes (See the TurboTax site for details.) I have used quite a few online tax preparation sites and in my opinion Turbo Tax is definitely the best way to go.

2008 Tax Rebate For Social Security Recipients

Update: See my latest posts on the Tax Rebate Payout Details in the 2008 Tax Rebate Category!

I have been getting a lot of questions from people asking if they will receive rebates if they are retired and receiving Social Security Benefits. The answer is yes. as long as the following items are true:

1. Individuals or families must have at least $3,000 in qualifying income, which can be income from or in combination with Social Security benefits, Veterans Affairs benefits, Railroad Retirement benefits and earned income
2. People must have valid Social Security Numbers.
3. People cannot be claimed as dependents or eligible to be claimed as dependents on another’s tax return.
4. People must file a 2007 tax form, i.e. Form 1040A.

If you have already filed a 2007 tax returns showing $3000 or greater in income then you are all set and will receive the rebate starting in May according to the recently posted Rebate Payout Schedule.

If you have already filed a 2007 return but did not include your Social Security benefits as income, you will need to file an amended return using the Form 1040X to qualify for the rebate.

If you are receiving Social Security but don’t usually file, check out this Resoruce Guide from the IRS on the easiest way for you to file to receive your rebate.

And remember, the quickest way to get your rebate will be to file that 2007 tax return with direct deposit, otherwise you will get a paper check paid out sometime between May and July based on your SSN number.

2008 Tax Rebate Stimulus Plan Payout Schedule Posted

Update: Haven’t received your rebate yet? Use the Rebate Status Tool to find our when it is coming.

The IRS has posted the 2008 Tax Rebate Stimulus Plan Payout Schedule.

The date you receive your payment will depend on 2 things:

• The last 2 digits of your Social Security Number
• If you will receive it by direct deposit or by check

Payments for those receiving the rebate through direct deposit will start on May 2nd and be completed by May 16th. Payments that will be received by check will begin May 16th and be completed by July 11th.

If you elected direct deposit when you filed your 2007 tax return, you will receive your rebate through direct deposit as well. This will be the quickest way for you to receive the rebate. Especially for those whose last 2 digits of their SSN are closer to 100. Unforturnetly if you have all ready filed your 2007 taxes and did not elect direct deposit, there is no way to stop the rebate from coming as a check.

According to the IRS, “People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. A return must be filed by October 15 in order to receive a stimulus payment this year”

So for all you late filers, don’t forget that October 15th is a hard date you must file by to receive the 2008 tax rebate. This is free money, so don’t pass it up. If you are still unclear how much rebate you will be getting, try out the IRS.com Tax Rebate Calculator

And don’t forget that Uncle Sam is expecting you to blow all this tax rebate money on useless items to jump-start the economy! So be smart with this money considering the current economic slowdown that is happening.

2008 stimulus rebate schedule

2008 Retirement Contribution Limits

As we kick off 2008 now is a good time to make sure you are maxing out your 401k and ROTH IRA (if eligible). Remember that a 401k and ROTH might be the only thing you will have when you retire considering the current state of Social Security. So start maxing out today since the earlier you do it the greater it will grow before you need to use it!

Here are the contribution limits for 2008 for each retirement plan (401k, ROTH, 403b, and Simple IRA). I also included the 2007 limits as a comparison:

Note that for a ROTH IRA there are certain income limits that start to phase out how much you can contribute. If you are within the phase out range you can only make a partial contribution. If you are above that range then you are not eligible to make a contribution to a ROTH for that year. When you file your taxes it will tell you how much you can contribute based on your adjusted gross income (AGI). Personally, I usually wait to contribute to my ROTH the day before I file my taxes to make sure I haven’t over contributed based on my AGI.

Also don’t forget that you can still contribute to your ROTH IRA for 2007. Just make sure you do so prior to filing your 2007 taxes.

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